Determine after-tax cash flow for this asset over six years

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Reference no: EM131528763

"A fully automatic chucker and bar machine is to be purchased for $50,000, to be borrowed with the stipulation that it be repaid with six equal end-of-year payments at 12% compounded annually. The machine is expected to provide an annual revenue of $15,000 for six years and has a CCA rate of 30%. The salvage value at the end of six years is expected to be $3,000. Assume a marginal tax rate of 36% and a MARR of 15%

(a) Determine the after-tax cash flow for this asset over six years.

(b) Determine whether the project is acceptable on the basis of the IRR criterion".

Reference no: EM131528763

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